[Weekly Summary] Why do I win sometimes and lose other times with the same chart?

Today, I would like to summarize this week's posts.

This week, I have been writing on the theme of "market perspective."

I first became conscious of "market perspective" about four years ago.

Actually, at that time, the school's curriculum did not

• Currency strength
• Fundamentals

cover elements "other than technical analysis" very much.

In FX, all the psychology of market participants is incorporated into the chart.

Therefore, it is enough to just look at the chart.

That is what I thought.

However,

with similar chart patterns, for example,

three MAs are pointing upward for an uptrend

yet, in situation A, the price extends, but in situation B, it does not.

Why is there a difference between A and B?

Is the thickness of the candlesticks different?

→ They are about the same.

Is the degree of the MA slope different?

→ It is about the same.

So, I went on to perform technical analysis one after another, "going into minute detail" about "Dow theory..." and "horizontal lines...".

But, it just became even more confusing.

I also felt that it would become more difficult for the students.

Because the "simplicity" would be lost.

So, I changed my way of thinking.

I decided to try being conscious of things I hadn't considered much until then,

・Currency strength
・Fundamentals

and focus on them.

As a result,

I clearly understood why, with similar chart patterns, the price extends in situation A but does not in situation B.

Chart patterns are actually just the "result".

I realized that the "real reason" that moves the chart is the fundamentals.

And from that time on, I began to understand what analysts mean by "market outlook".

I realized that "market outlook" is the ability to distinguish between good and bad market conditions.

"There is no such thing as a mysterious loss": The importance of the "choice not to trade" in FX

If you have experience in FX,

"I was able to do it with this pattern before, so why not this time..."

you must have felt that at least once.

If you think the answer is "I should study technical analysis more," you will likely fall into a trap.

The true cause of things is often not immediately apparent.

In such cases, trying to solve it symptomatically within the "range of what you understand" often does not work well.

At such times, incorporating a "new perspective different from what you have had before" can be a hint to a solution.

The definitive reason why you should wait and see on trades right now is that the future of the Middle East conflict is unpredictable.

I have written out the steps for understanding fundamentals in a story format by repeatedly asking "why."

The reason financial and economic news is hard to understand is that it lacks the "why."

The Strait of Hormuz has been blocked, and because of the "dollar buying in times of crisis," the dollar was bought.

With an explanation like this, can you understand "the reason why the dollar is being bought in the current situation"?

What exactly is "dollar buying in times of crisis"?

Why do "the blockade of the Strait of Hormuz" and "dollar buying" connect?

This way of thinking itself is not particularly difficult.

Just like we often did when we were children, you just keep repeating "why."

Keep repeating "why" in response to financial and economic news.

If you do that, you will gradually grasp as a "sense" how fundamentals affect the chart.

And,

In this day and age, you can use AI.

Utilize AI to repeatedly ask "why."

"Market intuition" is gradually cultivated as a result of that.

Why do beginners only look at the "wicks of candlesticks"? That is not what you should really be looking at.

In this article, I intentionally used the "intuitive term" of "thick bullish candle."

Usually, I think expressions like "large bullish candle" or "long body" are more common.

But, with that kind of phrasing, you cannot feel the "momentum of the market."

However,

Observing the "market momentum"

is that not a very important thing for "riding the trend"?

A "strong uptrend" reflects the strong sentiment of buyers.

On the other hand,

a "strong downtrend" reflects the strong sentiment of sellers.

And that "strength" is not expressed by "lower shadows or upper shadows."

"Strength" appears in the "thickness of the candlesticks."

"Market intuition" cannot be acquired through a manual.

The word "intuition" (kan) includes the meaning of actually seeing, feeling, and accumulating experience.

That is precisely why,

・Why did it move?
・Where did the strong will appear?

it is important to observe these things little by little.

That accumulation,

will eventually become the ability to judge "Should I attack now, or should I wait?"